Battery Energy Storage System Market Size, Share Analysis

Updated on : Oct 22, 2024

The global battery energy storage system (BESS) market size is estimated to be USD 7.8 billion in 2024. It is projected to reach USD 25.6 billion by 2029, growing at a CAGR of 26.9% during the forecast period from 2024 to 2029

A BESS system comprises several rechargeable batteries explicitly arranged to store energy from various sources, such as solar and wind renewable sources, and release it to the grid when the demand rises. The trend of shifting to renewable energy sources from fossil fuels drives the BESS market's growth.

Furthermore, the increasing installations of BESS in grid modernization projects globally and rising investments in enhancing grid functionality further drive the BESS market. Virtual power plants, battery material optimization, dynamic grid management, demand response, and capacity management programs are other key trends impacting the battery energy storage system industry growth.

Artificial intelligence (AI) is also being used to enhance BESS systems as AI technology could help optimize battery performance, improve efficiency, and thus enhance grid stability. The AI technology enables various advanced functionalities such as predictive maintenance and optimized charging & discharging cycles, which lead to sustainable BESS system design. 

Battery Energy Storage Market Insights and Growth Prospects

The global battery energy storage market is experiencing rapid growth, driven by the increasing demand for renewable energy integration, grid stability, and energy efficiency. As the world shifts towards cleaner energy sources like solar and wind, battery storage systems are becoming critical in balancing intermittent energy production and ensuring reliable power supply. Advancements in battery technology, particularly lithium-ion and solid-state batteries, are enhancing energy storage capacity, charging speeds, and lifespan, making these systems more economically viable for both residential and commercial applications. Additionally, government incentives, environmental regulations, and the growing focus on decarbonization are accelerating the adoption of energy storage solutions. The market is poised for further expansion as utilities, businesses, and consumers invest in energy storage to optimize energy use, reduce costs, and improve grid resilience. With continued innovation and declining costs, the Battery Energy Storage market is expected to play a pivotal role in the global transition to sustainable energy systems in the coming decades.

Battery Energy Storage System Market Forecast to 2029

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Battery Energy Storage System Market Trends

Driver: Increasing global investments for grid infrastructure enhancement

The escalating demand for reliable, cost-effective, and environmentally friendly energy storage solutions drives investments in grid infrastructure, thus boosting the BESS market growth. Increasing investments in grid infrastructure is a critical strategy to enhance energy systems' reliability, efficiency, and sustainability.

Such investments address multiple aspects of the power grid, including modernization, resilience, and integration of renewable energy sources. Hence, they are essential for meeting contemporary energy demands and future requirements.

Restraint: High installation and maintenance costs associated with BESS

The costs of battery energy storage systems depend on the type and the number of batteries used. During the installation of battery energy storage systems, the required capital cost is dependent on the footprint and power requirements of storage systems; components (batteries, power conversion systems, and BMS) used in them; and facility infrastructure (communications and control, environmental control, and grid interconnection) wherein they are deployed.

The capital cost also depends on the system control cost, the electric balance of point cost (BOP), and construction and commissioning costs (C&C). The varying costs also depend on the BESS’s applications, such as residential, commercial, and utilities. Thus, installing battery energy storage systems in a plant or any required place requires high capital investments that restrain the BESS market's growth.

Opportunity: Increasing opportunities in rural electrification

Rural electrification refers to making electrical power accessible to rural or remote areas. Various countries are developing their remote regions, such as isolated rural and semi-urban areas, especially in emerging countries and small islands that are not directly connected with national grids.

The installation of battery energy storage systems in rural areas would act as a solution to serve businesses and local communities with reliable and safe power supplies. The reliable and uninterrupted power supply from BESS projects can increase overall system efficiency and ensure savings during the systems' life cycles.

Challenges: Installation of battery energy storage systems in remote locations

Remote locations usually include islands and off-grid locations, which face various challenges owing to variable generation and power supply from renewable energy sources. T

he challenges are related to ambient conditions such as temperature variations during the day and night, high maintenance costs owing to commuting difficulties in reaching these locations, and the lack of equipment installation infrastructure.

Battery Energy Storage System Market Ecosystem

The advent of electric vehicles, renewable energy storage systems, and consumer electronics has driven increased investments in batteries and BESS from established and new players. The BESS market ecosystem has several participants, and each participant, from raw material suppliers to end users, has played a crucial role in developing and deploying battery energy storage systems worldwide.  

Battery Energy Storage System Market Segment

Lithium-ion (Li-ion) batteries account for the largest share of the battery energy storage market

Li-ion batteries are widely used in storing energy due to their power and long life. These batteries are versatile and can be used for small and high-power applications. Their use has grown a lot since the cost of batteries and the cost of storing energy dropped.

These batteries can work for electric vehicles and energy storage needs in residential, commercial, and industrial sectors. These batteries are also widely used in large-scale applications such as grid storage applications to power the grid during high peak demand times.

On-grid connection segment will account for a significant BESS market share during the forecast period

The on-grid battery energy storage systems help in energy storage on a large scale. Electrical energy is stored when electricity is available in plenty or when the demand is low. On-grid battery energy storage systems use utility grids to supply electricity to consumers, which also helps to reduce energy bills. Load leveling, peak shaving, and power demand management are the main applications of any on-grid connected battery energy storage systems installed with an electrical grid.

Residential application segment is to grow with a significant CAGR during the forecast period

BESS, such as wind and solar, generates a lot of energy, and batteries help store the excess energy generated during peak-hour production. This surplus energy can then be used in times of power outages. The energy storage during the peak production period leads to less wastage and thus drives the adoption of battery storage systems.

BESS is used in residential applications to power buildings such as condominiums, cooperative societies, and single-family homes. Using battery energy storage systems in residential applications enables savings on electricity bills, self-consumption, and emergency power backup.

Battery Energy Storage System Market by Region

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Battery Energy Storage System Market Regional Analysis

Asia Pacific segment to dominate the battery energy storage market during forecast period

The Asia Pacific market is segmented into China, Japan, India, Australia, and the Rest of the region. The region is the largest market for battery energy storage and is home to some of the fastest-growing economies in the world. Investments in energy storage are projected to rise significantly in the region, driven by favorable government policies that aim to enhance the quality and reliability of power distribution for residential, commercial, and industrial customers. Several countries in Asia Pacific are planning for electrification in remote areas that are mainly off-grid. These factors contribute to the BESS market growth in Asia Pacific countries.  

Top Battery Energy Storage System Companies - Key Market Players

• BYD Company Ltd,
• Samsung SDI Co., Ltd.,
• LG Energy Solution, and
• Panasonic Corporation are among the major players in the BESS market. Other companies in the market are Tesla, GE Vernova, Hitachi Energy Ltd., Siemens Energy and others.

Battery Energy Storage System Market Report Scope

Battery Energy Storage System Market Highlights

This research report categorizes the battery energy storage market by battery, connection type, ownership, energy capacity, application,  and region available at the regional and global level

Recent Developments in Battery Energy Storage Systems Industry

• In January 2024, Grenergy partnered with BYD to supply 1.1 GWh of ESS. The deal includes 2,136 units of BYD's high-performance MC Cube ESS model, featuring Blade batteries known for their safety and longevity.
• In January 2023, Sweden's prominent cultural center, Sara Kulturhus, is powered by a cutting-edge BESS created by ABB in collaboration with Skellefteå Kraft. The venue's unique design called for innovative solutions, and the BESS was designed to supply the entire building with dependable and environment-friendly electricity. Comprising a transformer, six battery packs provided by local supplier Northvolt, AC, and DC switchgear by ABB, and inverters by EPC Power, the BESS was crafted with careful consideration and extensive expertise.
• In May 2022, Toshiba Corporation introduced the 125VDC SCiB ESS, which combines the dependability of Lithium Titanium Oxide (LTO) battery chemistry with a flexible and expandable cabinet design. The Toshiba 125VDC SCiB ESS is available in various user capacities, including 5kWh, 10kWh, 15kWh, and 20kWh, making it suitable for integration with UPS or DC Load applications.

Key Questions Addressed by the Report:

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